Which of the Following Events Can Cause the Labor-supply Curve to Shift?

4.ane Demand and Supply at Work in Labor Markets

Learning Objectives

By the finish of this department, you lot will be able to:

• Predict shifts in the demand and supply curves of the labor marketplace
• Explain the touch of new engineering on the demand and supply curves of the labor market
• Explain price floors in the labor market such as minimum wage or a living wage

Markets for labor take demand and supply curves, just like markets for appurtenances. The constabulary of demand applies in labor markets this way: A higher salary or wage—that is, a higher price in the labor market—leads to a subtract in the quantity of labor demanded by employers, while a lower bacon or wage leads to an increase in the quantity of labor demanded. The law of supply functions in labor markets, also: A higher toll for labor leads to a college quantity of labor supplied; a lower cost leads to a lower quantity supplied.

Equilibrium in the Labor Market

In 2013, about 34,000 registered nurses worked in the Minneapolis-St. Paul-Bloomington, Minnesota-Wisconsin metropolitan area, according to the BLS. They worked for a variety of employers: hospitals, doctors' offices, schools, health clinics, and nursing homes. Figure 1 illustrates how demand and supply determine equilibrium in this labor market. The need and supply schedules in Table 1 listing the quantity supplied and quantity demanded of nurses at different salaries.

Figure 1. Labor Market Instance: Demand and Supply for Nurses in Minneapolis-St. Paul-Bloomington. The demand curve (D) of those employers who want to hire nurses intersects with the supply bend (Southward) of those who are qualified and willing to work as nurses at the equilibrium betoken (E). The equilibrium salary is $70,000 and the equilibrium quantity is 34,000 nurses. At an above-equilibrium salary of $75,000, quantity supplied increases to 38,000, but the quantity of nurses demanded at the college pay declines to 33,000. At this in a higher place-equilibrium salary, an excess supply or surplus of nurses would exist. At a below-equilibrium salary of $60,000, quantity supplied declines to 27,000, while the quantity demanded at the lower wage increases to twoscore,000 nurses. At this below-equilibrium salary, excess demand or a surplus exists.

Almanac Bacon	Quantity Demanded	Quantity Supplied
$55,000	45,000	20,000
$60,000	40,000	27,000
$65,000	37,000	31,000
$70,000	34,000	34,000
$75,000	33,000	38,000
$fourscore,000	32,000	41,000
Table 1. Demand and Supply of Nurses in Minneapolis-St. Paul-Bloomington

The horizontal axis shows the quantity of nurses hired. In this example, labor is measured by number of workers, but another common way to measure the quantity of labor is by the number of hours worked. The vertical axis shows the price for nurses' labor—that is, how much they are paid. In the real world, this "price" would exist total labor bounty: bacon plus benefits. Information technology is not obvious, but benefits are a meaning office (as high as 30 percent) of labor compensation. In this example, the price of labor is measured past bacon on an almanac basis, although in other cases the price of labor could be measured past monthly or weekly pay, or fifty-fifty the wage paid per hour. As the salary for nurses rises, the quantity demanded volition fall. Some hospitals and nursing homes may cutting back on the number of nurses they rent, or they may lay off some of their existing nurses, rather than pay them higher salaries. Employers who confront higher nurses' salaries may too attempt to replace some nursing functions by investing in physical equipment, like reckoner monitoring and diagnostic systems to monitor patients, or by using lower-paid health care aides to reduce the number of nurses they need.

Equally the salary for nurses rises, the quantity supplied will rise. If nurses' salaries in Minneapolis-St. Paul-Bloomington are higher than in other cities, more than nurses will motility to Minneapolis-St. Paul-Bloomington to find jobs, more than people will exist willing to railroad train equally nurses, and those currently trained as nurses will exist more than probable to pursue nursing as a full-fourth dimension chore. In other words, there volition exist more nurses looking for jobs in the area.

At equilibrium, the quantity supplied and the quantity demanded are equal. Thus, every employer who wants to rent a nurse at this equilibrium wage tin can find a willing worker, and every nurse who wants to work at this equilibrium salary tin find a job. In Figure 1, the supply curve (Due south) and demand curve (D) intersect at the equilibrium betoken (E). The equilibrium quantity of nurses in the Minneapolis-St. Paul-Bloomington expanse is 34,000, and the equilibrium salary is $lxx,000 per twelvemonth. This example simplifies the nursing market by focusing on the "average" nurse. In reality, of class, the market for nurses is actually made up of many smaller markets, like markets for nurses with varying degrees of experience and credentials. Many markets contain closely related products that differ in quality; for instance, fifty-fifty a unproblematic product similar gasoline comes in regular, premium, and super-premium, each with a different cost. Even in such cases, discussing the average price of gasoline, like the boilerplate salary for nurses, can still be useful because it reflects what is happening in most of the submarkets.

When the price of labor is not at the equilibrium, economical incentives tend to motility salaries toward the equilibrium. For example, if salaries for nurses in Minneapolis-St. Paul-Bloomington were in a higher place the equilibrium at $75,000 per year, and then 38,000 people want to work as nurses, but employers desire to hire merely 33,000 nurses. At that higher up-equilibrium salary, excess supply or a surplus results. In a state of affairs of excess supply in the labor market, with many applicants for every job opening, employers volition take an incentive to offer lower wages than they otherwise would have. Nurses' bacon will movement down toward equilibrium.

In contrast, if the salary is below the equilibrium at, say, $60,000 per year, so a situation of excess need or a shortage arises. In this case, employers encouraged past the relatively lower wage want to hire 40,000 nurses, just only 27,000 individuals want to work as nurses at that bacon in Minneapolis-St. Paul-Bloomington. In response to the shortage, some employers will offer higher pay to concenter the nurses. Other employers will take to friction match the higher pay to go along their own employees. The higher salaries volition encourage more nurses to train or work in Minneapolis-St. Paul-Bloomington. Once again, price and quantity in the labor market volition move toward equilibrium.

Shifts in Labor Demand

The need curve for labor shows the quantity of labor employers wish to rent at whatever given bacon or wage rate, under the ceteris paribus supposition. A alter in the wage or bacon will result in a modify in the quantity demanded of labor. If the wage rate increases, employers volition want to hire fewer employees. The quantity of labor demanded volition decrease, and at that place will be a movement upward forth the demand curve. If the wages and salaries decrease, employers are more likely to hire a greater number of workers. The quantity of labor demanded will increase, resulting in a downward movement along the demand curve.

Shifts in the need curve for labor occur for many reasons. One key reason is that the need for labor is based on the need for the expert or service that is being produced. For case, the more than new automobiles consumers demand, the greater the number of workers automakers will demand to hire. Therefore the demand for labor is chosen a "derived demand." Here are some examples of derived demand for labor:

• The need for chefs is dependent on the demand for restaurant meals.
• The demand for pharmacists is dependent on the demand for prescription drugs.
• The demand for attorneys is dependent on the need for legal services.

Equally the demand for the goods and services increases, the demand for labor will increment, or shift to the right, to meet employers' production requirements. As the demand for the appurtenances and services decreases, the need for labor will decrease, or shift to the left. Table two shows that in add-on to the derived need for labor, demand tin can also increment or decrease (shift) in response to several factors.

Factors	Results
Demand for Output	When the demand for the good produced (output) increases, both the output toll and profitability increase. As a result, producers demand more than labor to ramp upward production.
Educational activity and Training	A well-trained and educated workforce causes an increment in the demand for that labor by employers. Increased levels of productivity within the workforce will crusade the need for labor to shift to the correct. If the workforce is not well-trained or educated, employers will not hire from within that labor pool, since they will need to spend a significant amount of time and coin training that workforce. Demand for such volition shift to the left.
Engineering science	Technology changes can act every bit either substitutes for or complements to labor. When applied science acts as a substitute, it replaces the demand for the number of workers an employer needs to hire. For example, word processing decreased the number of typists needed in the workplace. This shifted the demand curve for typists left. An increment in the availability of certain technologies may increment the need for labor. Technology that acts equally a complement to labor will increase the need for sure types of labor, resulting in a rightward shift of the demand curve. For example, the increased utilize of word processing and other software has increased the need for data engineering science professionals who tin resolve software and hardware issues related to a firm's network. More than and better technology will increase demand for skilled workers who know how to apply engineering science to enhance workplace productivity. Those workers who do not arrange to changes in technology will feel a decrease in demand.
Number of Companies	An increase in the number of companies producing a given product will increment the demand for labor resulting in a shift to the correct. A decrease in the number of companies producing a given product will decrease the need for labor resulting in a shift to the left.
Government Regulations	Complying with regime regulations can increase or decrease the demand for labor at any given wage. In the healthcare industry, government rules may require that nurses be hired to acquit out certain medical procedures. This will increment the need for nurses. Less-trained healthcare workers would exist prohibited from carrying out these procedures, and the demand for these workers will shift to the left.
Price and Availability of Other Inputs	Labor is not the merely input into the production process. For example, a salesperson at a phone call center needs a phone and a figurer terminal to enter data and record sales. The demand for salespersons at the phone call center will increase if the number of telephones and computer terminals available increases. This will cause a rightward shift of the demand curve. Equally the amount of inputs increases, the demand for labor will increase. If the terminal or the telephones malfunction, and so the need for that labor force will decrease. As the quantity of other inputs decreases, the demand for labor will decrease. Similarly, if prices of other inputs fall, product will go more profitable and suppliers will demand more labor to increase production. The opposite is also true. College input prices lower demand for labor
Table 2. Factors That Tin can Shift Demand

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Shifts in Labor Supply

The supply of labor is upwardly-sloping and adheres to the law of supply: The higher the price, the greater the quantity supplied and the lower the cost, the less quantity supplied. The supply curve models the tradeoff between supplying labor into the market or using time in leisure activities at every given price level. The higher the wage, the more labor is willing to work and forego leisure activities. Table 3 lists some of the factors that volition cause the supply to increment or subtract.

Factors	Results
Number of Workers	An increased number of workers will cause the supply curve to shift to the correct. An increased number of workers tin be due to several factors, such as immigration, increasing population, an aging population, and changing demographics. Policies that encourage immigration volition increase the supply of labor, and vice versa. Population grows when nativity rates exceed expiry rates; this eventually increases supply of labor when the former accomplish working age. An aging and therefore retiring population will decrease the supply of labor. Another example of irresolute demographics is more than women working outside of the domicile, which increases the supply of labor.
Required Educational activity	The more than required teaching, the lower the supply. There is a lower supply of PhD mathematicians than of high school mathematics teachers; there is a lower supply of cardiologists than of primary care physicians; and there is a lower supply of physicians than of nurses.
Regime Policies	Government policies can also impact the supply of labor for jobs. On the one manus, the government may support rules that gear up high qualifications for certain jobs: bookish training, certificates or licenses, or experience. When these qualifications are made tougher, the number of qualified workers volition decrease at whatever given wage. On the other hand, the authorities may also subsidize training or even reduce the required level of qualifications. For example, government might offering subsidies for nursing schools or nursing students. Such provisions would shift the supply bend of nurses to the right. In addition, government policies that change the relative desirability of working versus not working also affect the labor supply. These include unemployment benefits, maternity leave, child intendance benefits and welfare policy. For example, child care benefits may increase the labor supply of working mothers. Long term unemployment benefits may discourage job searching for unemployed workers. All these policies must therefore be carefully designed to minimize any negative labor supply effects.
Table 3. Factors that Can Shift Supply

A change in salary will atomic number 82 to a movement along labor demand or labor supply curves, but it will non shift those curves. However, other events like those outlined here volition cause either the demand or the supply of labor to shift, and thus will move the labor market to a new equilibrium salary and quantity.

Technology and Wage Inequality: The Four-Stride Procedure

Economical events can modify the equilibrium salary (or wage) and quantity of labor. Consider how the wave of new information technologies, like computer and telecommunications networks, has affected low-skill and loftier-skill workers in the U.S. economy. From the perspective of employers who demand labor, these new technologies are often a substitute for low-skill laborers like file clerks who used to keep file cabinets full of paper records of transactions. However, the same new technologies are a complement to high-skill workers like managers, who benefit from the technological advances by being able to monitor more information, communicate more than easily, and juggle a wider array of responsibilities. Then, how will the new technologies affect the wages of high-skill and depression-skill workers? For this question, the four-step process of analyzing how shifts in supply or demand bear upon a market (introduced in Demand and Supply) works in this way:

Step 1. What did the markets for low-skill labor and loftier-skill labor look similar before the arrival of the new technologies? In Effigy ii (a) and Figure 2 (b), S₀ is the original supply curve for labor and D₀ is the original demand curve for labor in each market. In each graph, the original indicate of equilibrium, Due east₀, occurs at the price Westward₀ and the quantity Q₀.

Effigy 2. Technology and Wages: Applying Demand and Supply (a) The demand for low-skill labor shifts to the left when engineering science can practice the job previously done by these workers. (b) New technologies tin also increase the need for loftier-skill labor in fields such as information technology and network assistants.

Step 2. Does the new technology affect the supply of labor from households or the need for labor from firms? The technology change described here affects demand for labor by firms that hire workers.

Pace 3. Will the new engineering science increase or decrease need? Based on the description earlier, every bit the substitute for low-skill labor becomes available, demand for low-skill labor will shift to the left, from D₀ to D₁. Every bit the technology complement for high-skill labor becomes cheaper, need for high-skill labor will shift to the right, from D₀ to D₁.

Step 4. The new equilibrium for low-skill labor, shown as point Eastward_i with price West₁ and quantity Q₁, has a lower wage and quantity hired than the original equilibrium, East₀. The new equilibrium for high-skill labor, shown as bespeak Due east_i with price Westward_one and quantity Q₁, has a college wage and quantity hired than the original equilibrium (E₀).

So, the demand and supply model predicts that the new computer and communications technologies will raise the pay of loftier-skill workers but reduce the pay of low-skill workers. Indeed, from the 1970s to the mid-2000s, the wage gap widened between high-skill and low-skill labor. According to the National Centre for Education Statistics, in 1980, for example, a college graduate earned virtually 30% more than a high school graduate with comparable job experience, but past 2012, a college graduate earned about sixty% more an otherwise comparable high school graduate. Many economists believe that the trend toward greater wage inequality across the U.S. economic system was primarily caused past the new technologies.

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Cost Floors in the Labor Market: Living Wages and Minimum Wages

In dissimilarity to goods and services markets, price ceilings are rare in labor markets, because rules that prevent people from earning income are not politically pop. There is one exception: sometimes limits are proposed on the high incomes of top business executives.

The labor market, withal, presents some prominent examples of toll floors, which are frequently used equally an endeavor to increase the wages of low-paid workers. The U.S. government sets a minimum wage, a toll floor that makes it illegal for an employer to pay employees less than a sure hourly rate. In mid-2009, the U.S. minimum wage was raised to $7.25 per hour. Local political movements in a number of U.S. cities have pushed for a higher minimum wage, which they call a living wage. Promoters of living wage laws maintain that the minimum wage is as well depression to ensure a reasonable standard of living. They base this conclusion on the calculation that, if you work 40 hours a week at a minimum wage of $seven.25 per hour for 50 weeks a year, your annual income is $fourteen,500, which is less than the official U.S. government definition of what it means for a family to exist in poverty. (A family with two adults earning minimum wage and two immature children will find it more than price efficient for one parent to provide childcare while the other works for income. So the family unit income would be $xiv,500, which is significantly lower than the federal poverty line for a family of four, which was $23,850 in 2014.)

Supporters of the living wage debate that full-fourth dimension workers should be assured a high enough wage so that they can afford the essentials of life: food, clothing, shelter, and healthcare. Since Baltimore passed the first living wage law in 1994, several dozen cities enacted like laws in the belatedly 1990s and the 2000s. The living wage ordinances do not apply to all employers, merely they have specified that all employees of the city or employees of firms that are hired by the urban center exist paid at least a certain wage that is usually a few dollars per hour above the U.S. minimum wage.

Figure three illustrates the situation of a urban center considering a living wage constabulary. For simplicity, we assume that in that location is no federal minimum wage. The wage appears on the vertical centrality, because the wage is the price in the labor market place. Before the passage of the living wage constabulary, the equilibrium wage is $10 per hour and the city hires one,200 workers at this wage. All the same, a grouping of concerned citizens persuades the metropolis council to enact a living wage law requiring employers to pay no less than $12 per hr. In response to the higher wage, 1,600 workers expect for jobs with the city. At this higher wage, the metropolis, as an employer, is willing to hire only 700 workers. At the toll flooring, the quantity supplied exceeds the quantity demanded, and a surplus of labor exists in this marketplace. For workers who keep to accept a job at a higher bacon, life has improved. For those who were willing to piece of work at the old wage charge per unit but lost their jobs with the wage increase, life has not improved. Table 4 shows the differences in supply and demand at dissimilar wages.

Figure 3. A Living Wage: Case of a Price Flooring The original equilibrium in this labor marketplace is a wage of $x/hour and a quantity of 1,200 workers, shown at signal E. Imposing a wage flooring at $12/hour leads to an excess supply of labor. At that wage, the quantity of labor supplied is 1,600 and the quantity of labor demanded is only 700.

Wage	Quantity Labor Demanded	Quantity Labor Supplied
$8/60 minutes	i,900	500
$9/hr	1,500	900
$ten/hr	1,200	1,200
$eleven/hr	900	one,400
$12/hr	700	1,600
$13/hr	500	1,800
$fourteen/hr	400	1,900
Table 4. Living Wage: Example of a Toll Floor

The Minimum Wage as an Case of a Price Floor

Minimum Wage in Amerika Sāmoa

The minimum wage has been very controversial in Amerika Sāmoa. In 2007, the Federal minimum wage was raised to $7.25 (gradually). American Samoa was initially exempt simply then included by Nancy Pelosi (she did not want to appear to be granting favors to Del Monte). The minimum wage at that time in American Samoa was $3.26 and the increase was to be 50 cents per year (fifteen%). The Chicken of the Sea tuna canning plant was shut downwards in 2009 and 2,041 employees were laid off in the process. They blamed the shutdown on the increment in the minimum wage.

The U.South. minimum wage is a price flooring that is set either very close to the equilibrium wage or even slightly below it. About 1% of American workers are actually paid the minimum wage. In other words, the vast majority of the U.S. labor force has its wages determined in the labor market place, non as a result of the government price floor. But for workers with low skills and fiddling feel, similar those without a high schoolhouse diploma or teenagers, the minimum wage is quite important. In many cities, the federal minimum wage is apparently below the market price for unskilled labor, considering employers offer more than the minimum wage to checkout clerks and other low-skill workers without any government prodding.

Economists have attempted to approximate how much the minimum wage reduces the quantity demanded of low-skill labor. A typical result of such studies is that a 10% increment in the minimum wage would decrease the hiring of unskilled workers by i to 2%, which seems a relatively small reduction. In fact, some studies accept even institute no effect of a college minimum wage on employment at sure times and places—although these studies are controversial.

Let'southward suppose that the minimum wage lies just slightly below the equilibrium wage level. Wages could fluctuate according to marketplace forces to a higher place this price flooring, but they would not be allowed to move beneath the floor. In this state of affairs, the cost flooring minimum wage is said to be nonbinding —that is, the price floor is non determining the market consequence. Even if the minimum wage moves simply a little college, information technology volition still have no effect on the quantity of employment in the economic system, as long as it remains below the equilibrium wage. Even if the minimum wage is increased past enough and so that it rises slightly above the equilibrium wage and becomes bounden, at that place will exist only a modest backlog supply gap between the quantity demanded and quantity supplied.

These insights help to explain why U.S. minimum wage laws have historically had only a modest impact on employment. Since the minimum wage has typically been prepare close to the equilibrium wage for depression-skill labor and sometimes even below it, information technology has not had a big effect in creating an excess supply of labor. Even so, if the minimum wage were increased dramatically—say, if information technology were doubled to match the living wages that some U.S. cities have considered—then its touch on reducing the quantity demanded of employment would be far greater. The following Articulate Information technology Upward characteristic describes in greater detail some of the arguments for and confronting changes to minimum wage.

What's the harm in raising the minimum wage?

Considering of the law of demand, a college required wage volition reduce the amount of low-skill employment either in terms of employees or in terms of work hours. Although at that place is controversy over the numbers, allow's say for the sake of the argument that a 10% rise in the minimum wage will reduce the employment of low-skill workers by 2%. Does this consequence hateful that raising the minimum wage by ten% is bad public policy? Non necessarily.

If 98% of those receiving the minimum wage have a pay increment of 10%, but two% of those receiving the minimum wage lose their jobs, are the gains for lodge as a whole greater than the losses? The reply is not clear, because job losses, even for a small group, may cause more pain than modest income gains for others. For i thing, we need to consider which minimum wage workers are losing their jobs. If the 2% of minimum wage workers who lose their jobs are struggling to support families, that is one thing. If those who lose their job are loftier school students picking up spending money over summer vacation, that is something else.

Another complication is that many minimum wage workers do not work full-fourth dimension for an entire year. Imagine a minimum wage worker who holds different part-time jobs for a few months at a time, with bouts of unemployment in between. The worker in this situation receives the 10% raise in the minimum wage when working, but also ends up working 2% fewer hours during the year because the higher minimum wage reduces how much employers want people to piece of work. Overall, this worker's income would rising because the x% pay raise would more than start the 2% fewer hours worked.

Of course, these arguments exercise not prove that raising the minimum wage is necessarily a good idea either. There may well be other, amend public policy options for helping low-wage workers. (The Poverty and Economic Inequality affiliate discusses some possibilities.) The lesson from this maze of minimum wage arguments is that complex social problems rarely have simple answers. Even those who concur on how a proposed economical policy affects quantity demanded and quantity supplied may still disagree on whether the policy is a good idea.

Key Concepts and Summary

In the labor market, households are on the supply side of the market and firms are on the demand side. In the market place for financial capital, households and firms tin can exist on either side of the market: they are suppliers of fiscal capital when they salvage or make financial investments, and demanders of financial majuscule when they borrow or receive fiscal investments.

In the need and supply analysis of labor markets, the price can be measured by the annual bacon or hourly wage received. The quantity of labor can be measured in various ways, like number of workers or the number of hours worked.

Factors that can shift the need curve for labor include: a modify in the quantity demanded of the production that the labor produces; a change in the production process that uses more or less labor; and a change in government policy that affects the quantity of labor that firms wish to hire at a given wage. Need tin also increase or decrease (shift) in response to: workers' level of education and grooming, technology, the number of companies, and availability and toll of other inputs.

The main factors that can shift the supply bend for labor are: how desirable a job appears to workers relative to the alternatives, authorities policy that either restricts or encourages the quantity of workers trained for the job, the number of workers in the economy, and required education.

Self-Check Questions

1. In the labor market, what causes a movement forth the demand curve? What causes a shift in the demand curve?
2. In the labor market place, what causes a movement along the supply curve? What causes a shift in the supply curve?
3. Why is a living wage considered a price floor? Does imposing a living wage have the same outcome as a minimum wage?

Review Questions

1. What is the "price" commonly chosen in the labor market?
2. Are households demanders or suppliers in the goods market? Are firms demanders or suppliers in the goods market place? What most the labor market and the financial market?
3. Name some factors that can crusade a shift in the demand bend in labor markets.
4. Name some factors that can crusade a shift in the supply bend in labor markets.

Critical Thinking Questions

1. Other than the demand for labor, what would be some other example of a "derived need?"
2. Suppose that a 5% increment in the minimum wage causes a 5% reduction in employment. How would this affect employers and how would it impact workers? In your opinion, would this be a good policy?
3. What assumption is made for a minimum wage to be a nonbinding price floor? What assumption is fabricated for a living wage price floor to be bounden?

Problems

1. Identify each of the following as involving either need or supply. Draw a round period diagram and label the flows A through F. (Some choices tin can be on both sides of the goods market.)
   1. Households in the labor marketplace
   2. Firms in the appurtenances market
   3. Firms in the fiscal market
   4. Households in the goods market place
   5. Firms in the labor market
   6. Households in the financial market place
2. Predict how each of the post-obit events volition raise or lower the equilibrium wage and quantity of coal miners in West Virginia. In each instance, sketch a demand and supply diagram to illustrate your respond.
   1. The toll of oil rises.
   2. New coal-mining equipment is invented that is cheap and requires few workers to run.
   3. Several major companies that do not mine coal open factories in West Virginia, offering a lot of well-paid jobs.
   4. Government imposes costly new regulations to make coal-mining a safer job.

References

American Customs Survey. 2012. "School Enrollment and Work Status: 2011." Accessed Apr thirteen, 2015. http://www.demography.gov/prod/2013pubs/acsbr11-fourteen.pdf.

National Middle for Educational Statistics. "Assimilate of Instruction Statistics." (2008 and 2010). Accessed December 11, 2013. nces.ed.gov.

Glossary

minimum wage

a price floor that makes it illegal for an employer to pay employees less than a certain hourly rate

Solutions

Answers to Self-Cheque Questions

1. Changes in the wage rate (the cost of labor) cause a movement forth the demand bend. A change in annihilation else that affects demand for labor (e.g., changes in output, changes in the product process that utilize more than or less labor, regime regulation) causes a shift in the demand bend.
2. Changes in the wage rate (the price of labor) cause a movement along the supply curve. A change in anything else that affects supply of labor (e.g., changes in how desirable the job is perceived to be, government policy to promote training in the field) causes a shift in the supply bend.
3. Since a living wage is a suggested minimum wage, it acts like a price flooring (assuming, of form, that it is followed). If the living wage is binding, information technology will cause an backlog supply of labor at that wage rate.

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Source: http://pressbooks.oer.hawaii.edu/principlesofmicroeconomics/chapter/4-1-demand-and-supply-at-work-in-labor-markets/

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